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Brunei Darussalam: Promoting Takaful

On 29th June 2011, The Oxford Business Group reported the following about Brunei:

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Brunei Darussalam: Promoting takaful

The Sultanate’s sharia-compliant insurance sector is looking to expand its market share, stepping up efforts to promote takaful products and increase the range of policies on offer, with the sector likely to see greater segmentation as a result.

The sharia-compliant insurance sector is tightly regulated, with Takaful Order 2008 being the central document setting out the terms and conditions under which the industry operates. Issued in October 2008 and coming into force the following month, the order codified takaful operations, ensuring that the industry as a whole was based on a firm foundation and that, just as importantly, its products and activities met the requirements of sharia law.

To guarantee this, Takaful Order 2008 mandates that any product to be offered by a service provider has to be assessed and approved by the Sharia Financial Supervisory Board before it can be deemed as meeting the necessary standards and requirements.

The board, established in 2006, is tasked with monitoring and controlling the administrative and business dealings of institutions operating in the sharia-compliant segment of the financial sector, including takaful. Consisting of at least eight members, a mix of state officials, scholars and financial experts, the board serves as a guarantee that both best practices and sharia compliance are maintained across the sector.

The order also sets out the minimum financial requirements for a company to operate in the takaful segment, puts in place checks and balances for the sector, and mandates standards that senior officials must meet before being employed in positions of responsibility.

The industry has of late undergone something of a shake-up. Late last year, two of Brunei Darussalam’s three sharia-compliant insurance firms – Takaful IBB and Takaful BIBD – merged to form Syarikat Takaful Brunei Darussalam, with the two operating as separate units. Takaful IBB, which focuses on general policies, now trades as Takaful Brunei Am (TBA) while Takaful BIBD is now known as Takaful Brunei Keluarga (TBK), the unit dealing with family coverage. Along with Insurans Islam TAIB, they comprise the Sultanate’s takaful sector. Their conventional competition consists of nine policy writers, mainly subsidiaries of overseas firms.

Currently, general takaful policies – those covering vehicle, property and other business insurance – account for 80% or more of the total, with the remainder being private or family coverage, in the main life and health policies. In total, Brunei Darussalam’s takaful insurers account for around one-third of all premiums written.

The relatively low take-up of family coverage, especially health policies, can be largely attributed to the extensive social services provided by the state. With universal health coverage the right of all citizens, selling supplementary medical coverage can be difficult. However, this has not deterred TBK from relaunching its sharia-compliant health policy, Takaful As Syifa, which was first offered in 2002.

The policy has been redesigned to meet the needs of Bruneians who travel overseas by linking with international medical services provider International SOS, and it also covers additional health costs at home, including for alternative medicine services.

Recently, Brunei Darussalam’s takaful firms have been taking their message on the road, conducting information sessions to brief the public about the benefits of their products. Both TBA and TBK have been holding exhibitions in shopping malls, schools and community centres.

According to Mohammad Fuad Hamdi PD Hj Awang Salim, the assistant general manager at TBK, there is a need to develop an understanding of takaful insurance products in the marketplace. “Takaful As Syifa is a takaful medical plan coverage which provides reimbursement of medical expenses in respect of medical treatment due to illness or accident borne by the participant, and not many people are familiar with the matter,” he said during an exhibition in Gadong on June 5.

For the moment local operators in the takaful market will likely to continue to dominate the local market with little room for new international players. Though there is strong potential for growth, it will probably be only on a relatively small scale, given the limited size of the domestic market. For the foreseeable future at least, it will be up to the established local players to expand the existing product range and create an environment in which sharia-compliant products can flourish.

One of the scariest thing that young Bruneians face is the interview at the Public Service Commission or in Brunei speak known as Suruhanjaya Perkhidmatan Awam or better known as SPA. Get through the SPA interview, fortunes in the civil service awaits you. Or at least that is what's on the mind of everyone who applies for a job in the government service.

It's been quite sometime since I last interviewed anyone at SPA. I used to do it when I was the Deputy Director about 10 years ago. The one thing I noticed is that most people who were being interviewed mostly seemed ill prepared for it - some were very prepared for the wrong thing. There is this perception that if you remember the full name of the Minister or the list of Permanent Secretaries and Deputy Permanent Secretaries or the Director of the department or the Ministry that you are trying to get into together with their full names and titles, you are going to get the job. Wrong!

DESPITE first making its appearance in the Sultanate during the 1940s, Kuih Mor continues to be a household favourite today as a tea time snack or festive treat particularly during Hari Raya Aidil Fitri.

Siti Norhafizah Hj Bagol, a final year student at Universiti Brunei Darussalam who researched on Kuih Mor as part of her Brunei Traditional Industry module, said the three-ingredient sweet treat may have existed in Brunei as early as the 1940s when padi was known to have been grown to make different food items.

Over time, the cookie has also become a popular door-gift choice often handed out at Malay weddings or gatherings, said Siti Norhafizah.

Made with flour, oil and granulated sugar which have been ground into a powder, the bite-sized biscuits have a crumbly texture and are coated with powdered sugar.

The age-old technique of making Kuih Mor by hand has however changed over the course of time, with many now opt…